DMart’s Q2 profit growth trails revenue as expenses rise

Avenue Supermarts Ltd, which runs the DMart retail chain, reported a 17.8% year-on-year rise in consolidated revenue to ₹19,644 crore in the July-September quarter, driven by stronger growth at older stores and continued expansion across India.

Consolidated net profit rose 8.5% to ₹743 crore in the second quarter of FY27, slower than revenue growth. The company’s net profit margin narrowed to 3.8% from 4.1% a year earlier, while its earnings before interest, tax, depreciation and amortisation (Ebitda) margin declined to 7.1% from 7.3%.

The Mumbai-based retailer added 15 stores during the quarter, taking its total count to 518 as of 30 September. The company said entry-level wage inflation had led to a marginal increase in operating expenses, even as it remained committed to its value-for-money pricing strategy.

A key highlight of the quarter was stronger growth at older stores. “Two years and older DMart stores grew by 9.5% during Q2 FY27 as compared to 6.8% in Q2 FY26,” said Anshul Asawa, managing director and chief executive officer of Avenue Supermarts.

Operating expenses reflected the pressure of higher costs. Consolidated employee benefits expense rose 18.7% year-on-year to ₹447.14 crore, while finance costs jumped 82.8% to ₹63.90 crore. Depreciation and amortisation expenses increased 25.4% to ₹317.75 crore, and other expenses rose 18.3% to ₹1,091.83 crore.

Food and grocery products continued to dominate the retailer’s sales mix. They accounted for 56.9% of revenue in the first half of FY27, while general merchandise and apparel contributed 23.6%, and non-food fast-moving consumer goods (FMCG) accounted for 19.5%. The share of general merchandise and apparel edged up from 23.3% in the year-earlier period, while the share of food and non-food FMCG was broadly stable.

The company continued to follow its everyday low-cost, everyday low-price model, which focuses on sourcing products competitively and leveraging operational and distribution efficiencies to offer lower prices. It did not provide forward-looking guidance on revenue growth or store additions in its results announcement.

DMart’s online grocery and essentials platform, DMart Ready, operated in 11 cities in the first half of FY27, down from 19 in the corresponding period a year ago, according to the company’s investor presentation.

The subsidiary reported a net loss of ₹75.35 crore in the September quarter and ₹166.62 crore in the first half of FY27, according to the consolidated financial statements. The company’s presentation showed DMart Ready’s presence in 11 cities during the first half, although the results announcement did not separately detail the online business's financial performance.

“We are focused on driving greater operational efficiencies and strengthening overall customer experience in the cities that we currently operate in,” said Vikram Dasu, whole-time director and chief executive officer of Avenue E-Commerce Ltd, which operates DMart Ready.

The platform faces competition from quick-commerce companies such as Blinkit and Swiggy Instamart, which have expanded their dark-store networks to enable faster deliveries. DMart Ready’s focus on operational efficiency and customer experience comes as the company concentrates its online operations in fewer cities.

With markets shut on Saturday, investor reaction to the earnings will be evident when trading resumes on Monday.

Vaeshnavi reports on the business of consumption from Bengaluru, tracking how India shops, eats, and clicks. As a correspondent with Mint’s consumer economy team, she covers sectors ranging from retail and food and beverage to the rapid rise of quick commerce. She is a 2025 graduate of the Asian College of Journalism’s Bloomberg Business and Finance programme. She joined the Mint newsroom in May 2025 and this is her first stint in journalism. She holds a bachelor's degree in accounting and finance from the University of Madras. Vaeshnavi loves storytelling and breaking down complex jargon and numbers to bring out insightful yet simple-to-understand narratives. She is a Malayali but has spent most of her life living in Chennai. During her school days, she was an avid debater and loved participating in anything that involved holding a mic and standing on stage talking to a room filled with people. A diehard SRK fan, she can be found vibing to Indie music and Bollywood songs in her free time. She is a self-confessed cold coffee addict who won’t let a day pass without one, and is always café-hopping in search of the city’s best brew.

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